Filing Of Returns
(Project Paper Created As Partial Fulfillment For The Internal Assessment In The
‘Corporate Tax Planning’ Paper (Finance) )
Kaushik Bannerjee (Roll No: ) Sayudh Sarkar (Roll No: 14)
Return Of Income – The Concept
Prior to moving into our main topic, viz, ‘return of income’, we need to have a clear idea as
to what the term ‘income’, in context with taxation, connotes. Hence, at the outset, we define
‘Gross Total Income’ of any individual as the sum of the cash-inflows that (s)he receives
under the different heads of income (Income from House Property, Salaries, Profits and
Gains from Business, and Income from other sources).
Return of income, in turn, can be explained as the declaration of income by the assessee in
the prescribed format (as per the Income Tax Act). Any statement of income returns needs to
have the particulars of income earned under different heads, gross total income, deductions
from the gross total income, total income and tax payable by the assessee. In particular, the
CBDT (Central Board For Direct Taxes) notifies the assesses regarding the correct format for
filing income returns.
Filing of return of income is compulsory, as per Section 139(1) of the Income Tax Act, for
the following cases:
Companies and firms they have to file a return of income or loss for every
previous year on or before the due date, in the prescribed format,
Person other than a company or a firm Filing of return on or before the due date
is mandatory, if his/her total income or the total income of any other person in respect
of which (s)he is assessable under the Act during the previous year exceeds the basic
In continuance with the earlier group of people, they must furnish a return of his
income or the income of such other person during the previous year, and verified too,
in the prescribed format,
Individual/Hindu Undivided Family/Association Of Persons/BOI/Artificial
juridical persons Filing of returns is mandatory if the total income of such
a) Exceeds the basic exemption limit, and
b) Filing required, without giving effect to the provisions of 10A or 10B or 10BA
or Chapter VI-A of the Income Tax Act
The ‘due date’ in this context, refers to:
i) September 30 (for a company, person (other than company) whose accounts
are required to be audited under the Income Tax Act, and any working
partner of such firms, whose accounts need to be similarly audited), or
ii) July 31 (in case of any other assessee).
Filing Of Returns – Different Channels And Options
A) RETURN OF INCOME TO EMPLOYER
(u/s 139(1A), Income Tax Act)
This section gives an option to a person, being an individual who is in receipt of
income chargeable under the head ‘Salaries’, to furnish a return of his income for any
previous year to his employer.
The employer, on his/her part, has to furnish all returns of income received by him
on or before the ‘due date’ (explained before).
B) RETURN OF INCOME TAX THROUGH COMPUTER READABLE MEDIA
(U/S 139(1B), Income Tax Act)
This section enables the tax-payer to file his/her return of income in computer
readable media. The assessee can be both a corporate or a non-corporate person. Such
return of income needs to be in accordance with such scheme, as may be defined by
C) RETURN OF LOSS
(u/s 139(3), Income Tax Act)
This section requires the assessee to file a return of loss, in the same manner as in
the case of return of income, within the time allowed under Section 139(1) of the Act.
An assessee cannot carry forward or set off his losses against income in the same or
subsequent year, unless he has filed a return of loss in accordance with the provisions
of Section 139 (3) (This is as per the directions mentioned in Section 80 of the Income
However, losses under the head ‘Income from house property’, under Section 71B,
and ‘Unabsorbed depreciation’, under section 32, can be carried forward for set-off,
even though return of loss has not been filled before the due date.
D) BELATED RETURN
(u/s 139 (4), Income Tax Act)
Any person who has not furnished a return within the time allowed to him/her, as per
Section 139(1), or within the time allowed under a notice issued under Section 142(1)
has the additional option of:
a) Filing returns prior to the expiry of one year from the end of the relevant
assessment year, or
b) Before the completion of the assessment, whichever is earlier.
However, no ‘belated return’ can ever be revised (except under section 139(1), or
under notices of section 142(1)).
E) RETURN OF INCOME OF CHARITABLE TRUSTS AND INSTITUTIONS
(U/S 139 (4A), Income Tax Act)
This provision of filing returns includes every person who receives income, that is
derived from property, held under trust or any other legal obligation, wholly or partly
for charitable or religious purpose. Incomes received by way of voluntary
contributions are also covered under this section.
Returns under this head must be filed by the representative-assessee voluntarily
within the time limit. Penalties and interest charges would be levied in case of any
rule-violation in this regard by the assessee.
F) RETURNS BY UNIVERSITIES, COLLEGES, ETC. (Mandatory)
(u/s 139 (4D), Income Tax Act)
This section states, it would be mandatory for every university, college, or any other
institution referred to in clause (ii) and (iii)of Section 35(1), to furnish its return in
respect of its income or loss in every previous year. These institutions would not be
required to furnish its return of income or loss under any other provision of Section
G) RETURN OF INCOME OF POLITICAL PARTIES
(u/s Section 139 (4B), Income Tax Act)
As per this section, a political party is required to file a return of income if, before
claiming exemption under Section 13A, the party has taxable income. There are
certain conditions under which exemptions from income-tax can be claimed by a
political party. For such exemptions to be allowed, the political party has to submit a
return of its total income within the time limit prescribed under Section 139(1).
In addition, the chief executive officer of the political party is statutorily required to
furnish a return of income of the party for the relevant assessment year. This
provision is for cases where the amount of total income of the previous year exceeds
the basic exemption limits, before any exemption is claimed (under Section 13A).
H) FILING OF RETURNS BY SCIENTIFIC RESEARCH ASSOCIATIONS,
NEWS AGENCY, TRADE UNIONS, ETC. (Mandatory)
(u/s 139 (4C), Income Tax Act)
The following associations/institutions must compulsorily file the return of their
Scientific Research Associations (u/s 10(21))
News Agencies (u/s 10(22B))
Associations or Institutions (u/s 10(23A))
Institution (u/s 10(23B))
Fund or Institution (u/s 10(23C) (iv))
Trust or Institution (u/s 10(23C) (v))
University or other educational institution (u/s 10(23C) (vi) (iiiad))
Hospital or other medical institution (u/s 10(23C) (via) (iiiae), and
Trade Unions (u/s 10(24)(b)
The provisions under this section are applicable in a similar manner to those present under
Section 139 (1) of the Income Tax Act.
I) REVISED RETURN
(u/s 139 (5), Income Tax Act)
If any person, having furnished a return under Section 139 (1), or as per the notices
related to Section 142 (1), finds out any omission, or any wrong statement therein, he
may furnish a revised return at any time before the expiry of one year from the end of
the relevant assessment year, or before the date of assessment-completion, whichever
J) DEFECTIVE RETURN
(U/S 139 (9), Income Tax Act)
Under this section, the Assessing Officer has the power to call upon the assessee to
rectify a defective income return. He can point out the defect in the return to the
assessee, and give the latter an opportunity to rectify the defect within a period of 15
days from the date of such intimation. In case the assessee provides a special
application, the Assessing Officer can extend this period by a further 15 days, on his
However, if the defect is not corrected within the period of 15 days or such extended
period, the return would be considered as an invalid return. The Assessing Officer can
condone this delay, though, if the defect is rectified before the actual assessment is
Any income-return has to be filed, along with the following documents:
A statement showing the computation of the tax payable on the basis of the
The report of the Audit (under section 44AB),
Proofs regarding the tax, if any, claimed to have been deducted or collected at
source, and the advance tax and tax on self-assessment, if any, claimed to have
been paid, and
Proof of the amount of compulsory deposit, if any, claimed to have been paid
under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974.
Scheme For Submission Of Returns Through Tax Return Preparers
For the purpose of enabling any specified class(es) of persons to prepare and furnish their
returns of income, the CBDT may notify a Scheme to provide that, such persons may furnish
their returns of income through a Tax Return Preparer. Incidentally, a Tax Return Preparer
can be person except a chartered accountant, a legal practitioner entitled to practice in Indian
civil courts, an employee under the ‘specified class(es) of persons, or any officer of scheduled
banks, where the assessee maintains a current account or has other regular dealings.
Authorised Signatories To The Return Of Income
(as per Section 140, Income Tax Act)
When the assessee is an ‘Individual’, the authorised signatory can be:
The individual himself,
Any person duly authorised by him,
His/her guardian, and
Any other person competent to act on his/her behalf.
When the assessee is a ‘Hindu Undivided Family’, the authorised signatory can be:
The ‘Kurta’, or
Any other adult member of the HUF.
When the assessee is a ‘Company’, the authorised signatory can be:
The managing director of the company,
Any director of the company,
A person who holds a valid power of attorney,
The Principal Officer of the company.
When the assessee is a ‘Firm’, the authorised signatory can be:
The managing partner of the firm, or
Any partner of the firm, not being a minor
When the assessee is a ‘Local Authority’, the authorised signatory is the Principal
When the assessee is a ‘Political Party’, the authorised signatory is the Chief
When the assessee is a ‘Any Other Association’, the authorised signatory is the
Principal Officer, or any other person.
When the assessee is a ‘Any Other Person’, the authorised signatory is him/herself, or
someone competent to act on his/her behalf..
Taxation (Paper 4) – Assessment Year 2009-10 (Board of Studies, The Institute Of
Chartered Accountants Of India)
Students Guide To Income Tax – Dr.V.K.Singhania